A lawyer for former Tory MP Neil Hamilton has accused Mohamed al-Fayed of inventing allegations against Conservative Home Secretary Michael Howard.

In the third day of the Harrods owner's evidence in the libel case, Desmond Browne QC again sought to present him to the jury as a persistent liar.

He accused him of threatening former Prime Minister John Major after claiming Mr Howard had taken a massive bribe from the late businessman Tiny Rowland.

But the barrister said the bribe had not existed and Mr al-Fayed had been "gunning" for the then home secretary because he had refused the Egyptian-born tycoon a British passport.

The libel case in Court 13 at the High Court surrounds allegations made by Mr al-Fayed that Mr Hamilton took cash in return for asking parliamentary questions.

Michael Howard: Blocked al-Fayed's citizenship bid

Mr Hamilton lost his seat in 1997 and says the allegations, which he has always denied, wrecked his parliamentary career.

The Harrods boss denies libel and pleads justification, saying Mr Hamilton took cash sums of up to £30,000 and gift vouchers worth £8,000.

Mr al-Fayed told the court: "I know the extent of what Tiny Rowland can do - he himself can bribe God. If God comes out he will bribe him."

He was then asked if he believed that Prince Philip had played any part in the refusal of his passport.

Mr al-Fayed said: "It's possible because he was the head of the establishment."

The lawyer then told the court Mr al-Fayed had several "covert" meetings with Mr
Rowland in an attempt to get him to say something to harm Mr Howard, but to no avail.

Earlier in the day's proceedings the judge, Mr Justice Morland had threatened to stop Mr al-Fayed from giving evidence after a series of "speeches" from the witness stand.

Mohamed al-Fayed: "Speeches" in court

Mr Justice Morland had repeatedly intervened during Mr al-Fayed's testimony to ask him to answer questions directly and stop long digressions.

Asked about his discussions of his allegations against Mr Hamilton before they were made public with former Express editor Peter Hitchen, Mr al-Fayed began to air his grievances against former Prime Minister Baroness Thatcher .

"I would like him to explain to the prime minister all the injustice, all the attacks on me - how somebody like me who come to this country, brought his money, his investment, created this great business, can be insulted, humiliated in hearsay reports.

"Is this fair? It's not good for the country, it's not good example for foreign investor, coming from the Middle East, take the country as his own, sacrifice his life and everything I done for Margaret Thatcher - all the things she asked of me - save the pound and brokered major arms deals.

"You think that fair, that Margaret Thatcher, when it suit her, she just throw me to the dogs, because she was worried that Tiny Rowland with The Observer, he knew about her son's arms deals.

"It's published on TV, on radio, in newspapers that Mark Thatcher had got hundreds of millions of commission for arms deals ..."

The judge interpreted as Mr al-Fayed paused: "That is the first and last speech today."

Soon after, when he was challenged about a remark he had made to Mr Rowland calling Mr Hamilton a "homosexual prostitute", Mr al-Fayed again began to talk at length.

"I think it is true. I have nothing against homosexuals," he said. "I employ hundreds of homosexuals ... there are homosexuals, Chris Smith in the cabinet and the minister of agriculture ... "

This time the judge's interruption was still sterner: "Mr al-Fayed, if you go on like this I will
stop you giving evidence."